The talk, “Why Accountants Don’t Run Startups” summarized my current thinking about startups, how and why they’re different than large companies and for good measure threw in a few thoughts about entrepreneurial education.

24 Responses

Steven, as someone who has recently written research on entrepreneurship and been part of an entrepreneurial process, I think that your analysis is spot on. I don’t think I have seen any literature make the clear distinctions you have done here. I think that a “process” view is fundamental to understanding what really is going on for the entrepreneur.

Slides look great, and I love that you’re emphasizing the distinction between startup small businesses and scalable startups. I also agree with Avron that there are ideas here that are new to the academic community studying entrepreneurship, although the work of the New Institutional Economics community is in many places complementary. Nate Rosenberg at Stanford, in particular, has been doing related work for decades.

One small, but important, comment: Since scalable startups need to keep books in addition to tracking metrics, and since growing large companies ought to track metrics in addition to keeping books, I would hope that the point is made that it isn’t either/or, but rather where the emphasis and focus should be.

Having spent some time studying financial statements from public companies, it’s a continual frustration that the public reporting makes it very difficult to backout the metrics that really tell you whether it’s a growing company or not. Elsewhere I have argued that one of lean accounting and management theory’s big conceptual contributions is to emphasize frequency-averaged measures of revenue and cashflow, such as turnover ratios. Electrical engineers can appreciate how useful it is to see the spectrum for your signal, since lots of important information can be hidden in a time series, much less a time average like what you get in your income and cashflow statements.

I’ve been reading your blog for a while (well, pretty much since you started it) and have seen these ideas publicly gel over that time via your comments and posts. The current presentation does a great job of encapsulating much of what you’ve been saying. I think you’ve really hit it with this.

The earlier slides in the deck on hypothesis testing, getting out of the building, and pivoting can still use some refinement. The concept of what a search for a biz model entails is there, but it’s not nearly as refined as the rest of the deck.

Obviously, the slides support the talk and are difficult to take stand-alone, but just taking them at face value, I like how the later slides bring the concepts together better than the earlier. Either way, great deck.

Steve, this is a wonderful presentation, but I’m a little confused about something. The question of process within startups seems to be a contentious one. For example, Eric Ries recently wrote a piece for the Harvard Business Review about how much process is needed for a startup. In the article he wrote, “building a great product depends on [startups developing some kind of process]”. He also makes the point that the amount of process should only be the amount *needed* to keep learning (which isn’t very much).

This is a little at odds with page 34 of your slide, where you write that a CEO of a scalable startup “hates and eliminates” process. Is this just hyperbole you used to illustrate your point, or is Eric Ries wrong to suggest that startups DO need some process?

Is it more valuable to gain experience in starting a start-up, or to have experience in the industry where you want to start a company?…

It takes a different skillset to build a company than it does to maintain one. Steve Blank has a great presentation that I’ve been regularly citing for the last year called “Why Accountants Don’t Run Startups” about the different personalities need…

[…] In preparation for Wednesday’s Lean Startup meeting, the organizer of the event asked us newbies to watch a lecture on the current state of entrepreneurship in the United States, presented by a long time businessman and entrepreneur Steve Blank. I found the presentation to be enlightening and inspirational enough that I decided to do a riff on the title of the original lecture – “Why Accountants Don’t Run Startups”. […]

[…] loses interest in a venture and moves on to create his next startup once his company has crossed the chasm from being an organization searching for a scalable business model to being a real business that is […]